Wealth workout

Benefits for silver savers, but be sure to re-evaluate

Good news for silver savers this week, with the launch of two savings accounts and a bond designed specifically for the older generation.

Saga introduced an Online Savings Account paying 6.2 per cent gross interest a year to savers aged 50 or over. The rate is guaranteed to be 0.45 of a percentage point above Bank of England base rate, currently 5.75 per cent, for the first year. The account guarantees to pass on any increases in the base rate within two days. The account can be opened with a minimum investment of £1.

Kevin Mountford, head of savings at price comparison website moneysupermarket.com, said: "It's a fantastic result for UK savers who usually wait 21 days for a base rate rise to be passed on, if they see one at all. This is promising for the first 12 months, but be careful in the following years. Year two sees the account match the base rate, and in year three the interest goes 0.2 of a percentage point below the rate. Silver savers would be wise to take advantage of the easy access and re-evaluate after the first year."

New Principality for the over-60s

Principality Building Society - Wales' largest -launched a monthly income account on Tuesday for people over 60.

The 60+ Monthly Income Account is a 60-day notice account which pays 5.75 per cent gross interest a year. The rate guarantees to match the Bank of England base rate until January 1, 2009. Just £1 is required to open the account, which can be operated via Principality's 50 branches, or by post. Savers must give 60 days' notice to make a withdrawal, or they will forfeit 60 days' interest on their money. For more information, visit www.principality.co.uk.

Abbey launches its latest fixed-rate

Abbey this week launched the latest tranche of its fixed-rate savings accounts, paying up to 6.25 per cent gross interest a year.

The bank's three-year term 50+ Bond, for savers aged 50 or over, now pays 6.25 per cent gross on a minimum investment of £1. Or savers can opt to receive interest monthly, and will earn 6.08 per cent gross interest.

The Children's Saving Bond - open to savers under the age of 18 - has a longer four-year term, but also pays 6.25 per cent gross interest a year.

Finally, the bank's Fixed Rate bonds, which can be taken out over one, two or three years, now pay 6.1 per cent , 6.15 per cent and 6.2 per cent gross interest a year respectively. Savers wishing to earn monthly interest will earn 5.94 per cent , 5.98 per cent and 6.03 per cent , depending on whether they opt for the one, two or three-year bond.

Reza Attar-Zadeh, head of savings and investments at Abbey, said: "Our 50+ Saver account has proved highly popular and we expect the 50+ bond to appeal to similar savers. The 50+ market holds 60 per cent of all savings and are responsible for over 40 per cent of all consumer demand."

Appealing to younger savers

Leeds Building Society launched two savings accounts for children paying 5.2 per cent gross interest a year. The accounts can be opened with £10, and withdrawals can be made without notice or penalty.

Karen Wint, of Leeds Building Society, said: "Our research showed that around 85 per cent of young savers originally opened their account below the age of 12. We have designed two different concepts to appeal to these children, and those up to 17.

"Our account for those aged up to 11 years old is called the Dinosaver. Three characters on a wall chart: Tricera-saver, Saver-dactil and Dinosaver-rex explain the reasons to save. The wall chart and coloured pencils are free. Dinosavers will receive a free Tricera-saver cuddly toy once their balance hits £200."

The account for children aged 12 and 17 is called 'The Vault' and pays 5.2 per cent gross interest a year. For information, visit your local branch, the website at www.leedsbuildingsociety.co.uk, or call the savings hotline on 08450 540 995.

National Counties bond to beat inflation

National Counties Building Society launched an Index-Linked Savings Bond this week which guarantees to pay interest in excess of inflation over either a three or a five-year investment period.

The bond, which can be opened with £500, pays 1.7 per cent a year fixed for three or five years, plus, on maturity, 130 per cent of the percentage change in the Retail Prices Index (RPI) over three years, or 132 per cent of the percentage change in RPI over five years.

For example, if the rate of RPI inflation remains at 3.8 per cent a year over the term, an investment of £10,000 on September 30, 2007, will have a pre-tax maturity value of £12,058 after three years, of which £519 is from the annual interest, and £1,539 is from the RPI Index-Linked interest on maturity. Over the three-year term the gross interest of £2,058 represents a gross interest rate of 6.4 per cent , which is 5.2 per cent net of tax at 20 per cent .

John Milton, chief executive of National Counties Building Society, said: "We have been able to set the potential return to the investor at a level that gives a positive return over inflation even after deduction of income tax at 20 per cent .'' The bond is only available until September 30. Visit www.ncbs.co.uk, or call 0845 603 4876

Instant access to Bank of Scotland

Bank of Scotland this week introduced a new issue of its Instant Access Savings Account Reward (IASA Reward).

The account - available until September 11 - offers a fixed rate of 6.35 per cent gross a year on balances between £100,000 and £1m. Balances of £5,000 to £24,999 earn 6 per cent gross, £25,000 and £49,999 earn 6.2 per cent ; between £50,000 and £99,999 earn 6.3 per cent gross. Up to four with-drawals are permitted in the one-year fixed-rate term, and unlimited deposits until December 31, 2007. After the fixed term is up, the account reverts to the standard Instant Access Savings Account with variable interest rates. Visit www.hbosplc.com, or telephone 08456 020304.